2012 (1) TMI 107 - AT - Central Excise

Waiver of pre deposit - Assesse manufacturer of wiring harness which are classifiable under heading 8544 30 30 - Held that - Explanation to Section 2(d) is to the effect that excisable goods would include any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. As such, it is clear that said explanation relates to marketability aspect of the product - in any case waste and scrap arising in the appellants factory would not prima facie get covered under 8548 90 00 but may prima facie get covered under Heading 7404 00 12. Inasmuch as the show cause notice proposes classification of the waste and scrap under Heading 8548 90 00 with which we prima facie do not agree, we find that the appellants have earned their stay - Stay granted.

Summary

Issues:
- Request to dispense with the pre-deposit condition and penalty imposed on the appellant, a manufacturer of wiring harness.
- Interpretation of the Delhi High Court decision in the case of Modi Rubber Ltd. regarding the amendment of Section 2(d) of the Central Excise Act, 1944.
- Analysis of the marketability aspect of excisable goods under the explanation to Section 2(d).
- Classification of waste and scrap arising in the appellant's factory under different headings.

Analysis:
The judgment addresses the appellant's plea to waive the pre-deposit condition and penalty related to the end cutting of wire during the manufacturing process of wiring harness. The Tribunal refers to the Delhi High Court decision in Modi Rubber Ltd. case, highlighting that the judgment does not apply to the appellant due to the amendment of Section 2(d) of the Central Excise Act post the mentioned case. The explanation to Section 2(d) clarifies that excisable goods include items capable of being bought and sold, emphasizing the marketability aspect. The Delhi High Court's ruling focused on the manufacturing process, stating that waste and scrap from manufacturing cannot be considered an outcome of the manufacturing event.

Moreover, the Tribunal observes that the waste and scrap from the appellant's factory may not fall under the classification proposed by the show cause notice. Instead, it suggests that the waste and scrap could potentially be categorized under a different heading, indicating a disagreement with the proposed classification. Consequently, the Tribunal grants the appellant's request to dispense with the pre-deposit condition and penalty, allowing the stay petition. The judgment provides a detailed analysis of the legal aspects concerning the appellant's case, considering both the specific circumstances and relevant legal interpretations to reach a fair decision.